Chewy's Long-Term Strategy: Focusing on Customer Loyalty and Recurring Purchases

Chewy's recent stock dips are short-term, and the company is set up for long-term success with a strong customer loyalty base. Its membership plan and autoship program are growing steadily, and the company's recurring revenue will help it navigate economic volatility. With a customer base of 21 million and 41% market share, Chewy stands out in the pet supply industry, outperforming competitors like Petco and PetSmart.

Chewy Inc. (CHWY) has seen its stock price dip significantly from its all-time highs, currently trading at $37 per share. However, a closer look at the company's strategic initiatives and financial performance suggests that this dip may be short-term, with the company well-positioned for long-term success. Chewy's recent stock performance can be attributed to various factors, including market sentiment and short-term economic volatility.

Chewy's subscription-first transformation strategy, executed through its Autoship program, Chewy+ membership platform, and vertical integration into healthcare services, has been a key driver of growth. The company's Autoship subscription service accounted for 83% of net sales in Q2 2025, indicating a strong commitment to recurring revenue. Additionally, the Chewy+ paid membership program reached 3% of monthly sales after just one quarter, showcasing the company's ability to attract and retain customers Chewy Stock is Down 70% From All-Time Highs. Here’s Why It Can Gain 28% From Current Levels!^[1].

Chewy's customer base of 21 million and 41% market share in the pet supply industry underscore its dominant position. The company's focus on premium product curation, including fresh food offerings, and its expanding Chewy Vet Care network have helped it outperform competitors like Petco and PetSmart. Chewy's Q2 revenue of $3.1 billion, up 8.6% year over year, and an adjusted EBITDA margin of 5.9% demonstrate its ability to generate significant revenue and maintain profitability Chewy Stock is Down 70% From All-Time Highs. Here’s Why It Can Gain 28% From Current Levels!^[1].

The company's strategic execution under the leadership of CEO Sumit Singh is evident in its growth initiatives. Chewy achieved record Autoship sales of $2.58 billion with growth rates outpacing total revenue at nearly 15%. The newly launched Chewy+ program and the fresh food brand "Get Real" have shown promising results, with strong palatability scores and premium market positioning Chewy Stock is Down 70% From All-Time Highs. Here’s Why It Can Gain 28% From Current Levels!^[1].

Chewy's capital return programs, including $125 million in buybacks in Q2, and its debt-free balance sheet with a cash balance of almost $600 million, further indicate the company's financial stability and commitment to shareholder value. The company's focus on subscription penetration, premium categories, and healthcare services aligns with the growing pet humanization trend, positioning Chewy for long-term success Chewy Stock is Down 70% From All-Time Highs. Here’s Why It Can Gain 28% From Current Levels!^[1].

While the current stock price may reflect short-term market volatility, Chewy's strategic initiatives and strong financial performance suggest that the company is well-positioned for long-term growth. Analysts project that Chewy stock could reasonably reach $48/share by January 2028, based on valuation assumptions, implying a total return of 28% from today’s price Chewy Stock is Down 70% From All-Time Highs. Here’s Why It Can Gain 28% From Current Levels!^[1].

In conclusion, while Chewy's recent stock dips may be attributed to short-term market sentiment, the company's strategic initiatives and strong financial performance indicate that it is well-positioned for long-term success. Investors should closely monitor the company's progress in executing its subscription-first transformation strategy and expanding its premium categories and healthcare services.